1. The way in which they traveled from Detroit to Washington D.C. was different. Two weeks ago Wagoner, Mullay, and Nardelli each flew to Washington three separate company private jets. There is something wrong when you step off of a private jet begging for money. Since then the companies have made efforts to cut their costs by selling these jets, Ford stating that it had sold 5 of their 7. Today the three CEO’s drove from Detroit to Washington in company Hybrid cars. They were finally getting the message that they cannot go on with “business as usual” when their companies are around the corner from bankruptcy. The three companies have made several budget cuts, and all three CEOs have even agreed that, if Congress gives them this bailout money, they will lower their salaries to $1 per year.
2. The amount of money that they were asking for changed. Two weeks ago Wagoner, Mullay, and Nardelli were asking Congress for 25 billion dollars in bailout money. At the time, they had no explanation for why that was the amount of money they needed, it was just a number that was put on the table. When asked how they were planning to split it up between the three of them Wagoner answered, “we are asking for 10 to 12 billion”, Nardelli answered, “about 8 billion”, and Mullay stated, “whatever is left”. Is it just me, or is there something seriously wrong with so loosely asking for billions of dollars from tax-payers. Today the three CEO’s were asking congress for 34 billion dollars, 9 million more than two weeks ago. This time however they knew exactly how they were going to split it up. GM said they will need 18 billion, Ford will need 9 billion, and Chrysler will need 7 billion in order to survive. If the government fails to help them, GM and Chrysler could go bankrupt by the end of the month, while Ford would follow in early to mid 2009.
3. Their way of doing business has changed. Two weeks ago Wagoner, Mullay, and Nardelli came to Washington with absolutely no plan, and absolutely no indication of how they were going to turn their companies around to be competitive with foreign automakers. GM, Ford, and Chrysler were losing billions of dollars every month, yet they believed that if Congress gave them 10 billion dollars they could magically become successful. Today the three CEOs showed up to Capital Hill with business plan in hand. The plans indicated what they were going to do with their bailout money, how they were going become competitive and successful, and how they were going to ensure that the taxpayers get their money back. For example, they will put billions of dollars into building fuel-efficient cars and invest in the technology to build cars of the future. They also said exactly when they would have the taxpayers paid back, GM stating that they will fully repay their loans by 2012.
There is a consensus among Republicans and Democrats that losing these companies will be catastrophic for America and our economy. However, there is a disagreement on how we can help these companies and ensure that they do not fail. Chris Dodd, Senator from Connecticut and chairman of the Senate Banking Committee, said that “failure for Congress to act would be playing Russian roulette with the entire economy of the United States”. Others, like Mitt Romney, Governor from Massachusetts, has said that we should let these companies go into bankruptcy and allow investors with a new vision for the company buy them out, and restructure them from the ground up. Many believe that throwing money at the problem will in effect just be “kicking the can down the road”. Some, like economist Mark Zandi, has said that 34 billion dollars is not even close to enough to save these companies, and that if given this bailout they will likely go bankrupt within the next two years. Zandi said that in order to save these companies they would need a much larger bailout around 75 to 125 billion dollars. Other people have also suggested a merger of at least two of the companies so that they can combine their assets, intuition, technology, skill, etc. and able them to not only save their companies, but to grow them, create jobs, and boost our economy. It is only a matter of days before we find out the fate of these companies, in the mean time they lie in the hands of our government.
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